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JPMorgan Delays Raising Outlook on Blackstone
Analyst Downgrades Blackstone to Neutral
JPMorgan has chosen to wait before raising its outlook on Blackstone, the leading brand in alternative investments. This decision comes despite Blackstone's successful investments, strong performance, lofty fundraising, and elevated shareholder returns. Analyst Kenneth Worthington downgraded Blackstone to neutral from overweight but slightly raised his price target. Worthington believes that many of the stock's positives are already priced in and would like to see organic growth supported again by perpetual fund growth, which is currently weighed down by a depressed sentiment for real estate investing.
Rally in Blackstone Shares
Blackstone shares have rallied almost 45% year to date, partly due to speculation that the stock will be added to the S&P 500. The company's second-quarter earnings were released on Thursday and were generally in-line with expectations. Worthington believes that potential thaw in deal-making activity in the private equity division would be a tailwind for Blackstone. However, he also thinks that the real estate sector will likely require a drop in rates to see a substantial improvement.
Conclusion
Despite Blackstone's impressive track record and positive performance, JPMorgan has decided to withhold an optimistic outlook for the company. Worthington's downgrade to neutral reflects his belief that the stock's positives are already priced in, and he would like to see further growth in the real estate sector. Although Blackstone shares have rallied significantly this year, an improvement in deal-making activity and a drop in rates may be necessary for substantial growth in the future. Investors will be closely watching Blackstone's development in the coming months.
JPMorgan Delays Raising Outlook on Blackstone: How Does This Impact New Businesses?
Analyst Downgrades Blackstone to Neutral
JPMorgan's decision to delay raising its outlook on Blackstone, the leading brand in alternative investments, could have implications for new businesses in the sector. Despite Blackstone's successful investments, strong performance, lofty fundraising, and elevated shareholder returns, Kenneth Worthington, an analyst at JPMorgan, downgraded Blackstone to neutral from overweight. Worthington believes that many of the stock's positives are already priced in and would like to see organic growth supported by perpetual fund growth, which is currently hindered by a depressed sentiment for real estate investing.
Rally in Blackstone Shares
Blackstone shares have experienced a significant rally, up almost 45% year to date, partly due to speculation that the stock will be added to the S&P 500. However, Worthington's downgrade suggests caution for new businesses hoping to enter the alternative investments market. While the second-quarter earnings of Blackstone were generally in-line with expectations, Worthington believes that the real estate sector will likely require a drop in rates to see substantial improvement.
Conclusion
For new businesses considering entering the alternative investments sector, JPMorgan's decision to hold off on raising its outlook on Blackstone should serve as a cautionary signal. While Blackstone has a strong track record and positive performance, Worthington's downgrade reflects concerns about the stock's current valuation. This implies that new businesses in the sector may face challenges in achieving significant growth unless the real estate sector sees an improvement in deal-making activity and a drop in rates. It is crucial for new businesses to closely monitor the developments in the alternative investments market and adapt their strategies accordingly to navigate potential headwinds and capitalize on future opportunities.
Article First Published at: https://www.cnbc.com/2023/07/21/jpmorgan-downgrades-blackstone-says-theres-little-room-to-run-for-the-stock.html.svg)
